A few weeks ago a friend of mine was being recruited for a few jobs at other companies. When you compared the salaries it seemed like a no-brainer. The other companies were offering 15-25k more per year for the same job title.
Over the course of just a few years that could make a big difference for pretty much anyone’s personal finances.
I also have received similar referrals from recruiters. Each time I’ve declined to pursue the job for various reasons. Today I want to break down 7 reasons it makes sense to turn down higher-paying job offers.
1) Opportunity for Advancement
In one particular job that my friend had looked into the department he was applying to had only seven employees. Now, relatively speaking, that may sound like a large department when compared to some small businesses.
The issue is that there may be little to no chance to advance. Let’s say you are at the ‘senior’ level, a step below manager. If the manager never leaves you really have no chance to move up to the manager position. Also, if the manager does leave the company may look for an outsider with management experience to fill the role.
Moving internally within a company is often easier than switching to a new company. If you work at a larger company there may be similar departments in other areas of the business that you can switch to.
2) Company Name & Status
If you work for a large corporation that other people and companies are familiar with you immediately have better job prospects than someone who worked at a small business.
For one, companies seem to love employees who have worked at Fortune 500 or even better, Fortune 50 or Fortune 25 companies. They know that you have experience working in a large organization and have dealt with the complexities that come with it. They also know you likely have worked on things that they hope to implement as their company grows.
If you work at a large, recognizable company and leave for a smaller company that isn’t well-known your next move is definitely going to be tougher.
3) Paid Time Off
Paid Time Off, or “PTO” as most people call it, is something that every employee treasures. It’s typical to only get two or three weeks off when you are starting out your career or sometimes even when you are new to a company.
If you are trying to decide whether to take a higher-paying job offer, but the higher-paying job offer has little PTO compared to your current job, you might want to reconsider.
Where I work you get over four weeks of PTO per year and an additional five days after you’ve been with the company for five years. One example of how PTO can level the playing field is by what you do with your PTO. Since I have four weeks, and not two, I plan on using one of those four to build a retaining wall in my backyard. This would cost me between six and ten thousand if I outsourced it.
4) Stress and Time Commitment
Most people are aware that investment bankers make a lot of money. Most people are also aware that they have insane work schedules, sometimes working in excess of 100 hours a week (see this cool article I found about a week in the life of an investment banker. Additionally investment banking jobs can be pretty stressful – there’s millions of dollars on the line every deal.
Salary can’t be the only variable taken into consideration when analyzing whether taking a new job is a good idea. I personally would not be interested in working 80-100 hours a week and missing countless weddings, birthdays, and family and friend events.
5) Company Resources
Companies treat resources differently. For example, some companies may freely approve software and hardware requests while others my be stingy about a $50 head set. This isn’t a small or large business issue, but a company culture issue.
Some companies simply have more resources for employees to develop their skills. Certain companies might invest in training programs, allot time for employees to develop skills, or have access to tools that other companies don’t have. It’s important to factor in how these resources will help you reach goals of higher-level job positions.
6) Location and Commute
Will you have to move to take a higher-paying job? What if the move is drastic, such as across the country? If you have a family you will have to factor in whether the move will be a positive thing for them. Are you moving away from family, friends, and a community that you enjoy? Deciding whether to move or not is a highly personal decision.
If you don’t have to physically move where you live, will your commute be longer? How will this affect your quality of life? If you have an apartment this may not be as big of a deal, but if you have a house you likely won’t sell and move simply to have a shorter commute. You could see if you can adjust your hours to avoid rush hour, but sometimes this is not possible.
7) You Like Your Current Job
If you like your current job it becomes much harder to switch. There’s a lot of uncertainty when you take a new job. What if you don’t like the company culture? What if it ends up being a bad fit? While I don’t think you should turn down a job simply because you’re comfortable, it’s something that you must factor in.
Have you ever turned down a higher-paying job offer? What factors do you take into consideration when trying to decide whether to take a job or not?
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Photo by Dave Collier
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I turned down a higher paying job for #4 stress and time commitment. I was working the life of that investment banking analyst and I was offered a promotion to the next level which would pay significantly more; however, I already knew what the schedule would be like and I missed having an outlet other than my job, so I declined and moved onto a job that gave me more personal flexibility. I never regretted it.
Great post. I’m in a job right now that involves a ton of both stress and time commitment and I actually recently cut back my hours (after only being in this position for a little over 18 months) because I am already getting too burned out. I’d rather make less money and be happier!
blonde_finance I’ve read a lot about the life people lead in investment banking and it seems like you have to be almost 110% committed to your job above anything else since there’s little time left over at the end of the “day” for other pursuits. Working long, stressful hours sometimes isn’t worth that higher paycheck.
colormefrugal Good for you! Excessive stress and subsequent burnout are real problems in today’s workforce. I’m glad you were able to make an adjustment that gives you a better quality of life.
I know someone who left a good job for a higher-paying job, then realized that she would only have 10 PTO days after it was already too late. Needless to say, that’s crazy! I feel bad that she didn’t do her research ahead of time. It’s all about the total package.
These are all great reasons to consider turning down a higher paying job. I think many of them are key, but really would come down to #4 for me, which would also include things like vacation/commute time in there as well. I’m all for making more money, but if it adds too much stress then it simply isn’t worth it.
I took a higher-paying job offer about six months ago and am very happy with my decision : ) YES I did have to give up some PTO… BUT on the flip side, my job is much lower stress on a day to day basis. It’s all about compromise.
I have learned from experience that taking a job just for the money is never a good idea. #4 is definitely a big one but I also think company culture is an important issue as well. Of course most of the time you won’t know the culture until you are working there.
Holly at ClubThrifty Yeah I would be weary of any job offering only 10 days of PTO. It’s just not very much time off and I’m not a fan of the PTO and sick day split. Then you have to essentially lie to take advantage of your sick days (which I’m sure 99% of people have done).
FrugalRules I think sometimes it can make sense to take more money with added stress and time commitments, but it would have to be a material amount and I definitely would only do it if I had some goal in mind (i.e. pay down debt aggressively, build up savings, etc.)
BudgetforMore It’s nice when higher-paying jobs come with less stress : )
I recently turned down a pretty high paying job, but for good reason. I just broke free from the chains of the 9 to 5 race on January 1st. I’ve been working hard this year on building my business, which I might add is going great! Although if I would have taken the offer I got last month, I’d be making a little more than I’m making now, I’d get benefits like PTO and insurance, and there are some other perks, deep down inside I know that I would be taking away from my business. In the long run, my business will offer me anything else anyone else would.
Raquel@Practical Cents I haven’t really been put in the situation where I had to decide whether to take on more stress for more money, but I think it is inevitable down the road.
I’ve never been in this position, but these are all good things to take into consideration. I’d probably take a job with higher pay as long as it didn’t mean more stress, less time off, and a much longer commute. The most I’ve ever gotten was 5 vacation days, though. I’ve worked at small companies before, and there really wasn’t much room for advancement. It doesn’t give you much incentive to work hard and take on new responsibilities, and people tend to leave once they feel they’ve reached their full potential.
Good points, you can’t just look at the salary, but instead look at the entire compensation package as well as other factors like you mentioned (commute, hours, stress, etc.) While more money is great…money isn’t everything. Room for advancement is very important. You don’t want to be short sighted.
Money is nice, but sometimes loyalty and the other things you mentioned go a long way. I’d rather make less and not have to be stressed out or commute forever. It’s hard to enjoy money when you’re never home or if you have a heart attack from anxiety.
JourneytoSaving That seems to be a huge problem for small businesses these days. It seems like people are always looking to move to bigger companies – depending on what their job is, of course. I know business professionals typically prefer larger companies because it gives them options if they ever want to leave. It doesn’t always work the other way around.
Eyesonthedollar There can definitely be a big difference in quality of life when you start talking about stress levels. Having less stress can be a big win both short- and long-term.
Andrew LivingRichCheaply I think a big problem with careers and work and whatnot is that it IS easy to be short-sighted. When you start talking 3, 5, or 10+ years down the road there’s a lot of uncertainty so naturally people look for what’s best in the short-term.
I don’t love my current job (don’t hate it though), but I’m locked in because I get paid fairly well, and I have 5 weeks of paid time off each year. That’s a lot of paid time off! I can’t sacrifice that. If I found a job that paid substantially more (with opportunity for advancement) then I might consider taking it, if they allowed for unpaid leaves of absences.
Nice post DC, should get you as a guest poster on the Career Crusader :)
If someone offered you 120K vs a 70K job with similar conditions, would you consider the 70K job?
Congrats on Hawaii as well
PrairieEcoThrifter I also get a lot of PTO (just under 5 weeks) so it’s hard to imagine giving up that PTO for another job, even if it was for higher pay.
mycareercrusade Haha thanks, I wish I had time to guest post! Well, I don’t see why you’d take 70k if you can get 120k with the same conditions?
DC @ Young Adult Money mycareercrusade I suppose that is a bit unrealistic, having said that if it were between 70K working from home and 120K working in an office would that change the situation?